Neetu Dhu­lia (Neetu): Which all pro­grammes are be­ing show­cased at the show (Paris Air Show)?

Colin R. Ma­honey (Colin): Paris is a very di­verse show for us. We are talk­ing in terms of the fu­ture of the avi­a­tion. What are we do­ing in the cock­pit of the air­craft and in the cabin of the air­craft, how are we con­nect­ing th­ese and com­mu­ni­cat­ing the eco struc­ture of avi­a­tion. The whole world is chang­ing around and we are look­ing at what we can do with sys­tems on the air­plane, sys­tems on the ground and putting that big pic­ture to­gether is what we are fo­cus­ing from an in­no­va­tion point of view. We are high­light­ing how the in­vest­ments in in­no­va­tive so­lu­tions for cock­pit, cabin, com­mu­ni­ca­tion and con­nec­tiv­ity are un­leash­ing the po­ten­tial of the rapidly chang­ing avi­a­tion ecosys­tem and that is what we are show­cas­ing at the Paris Air Show.

Neetu: What is the most cru­cial fu­tur­is­tic tech­nol­ogy Rock­well is work­ing to­wards th­ese days?

Colin: We are tak­ing an­other leap to­wards trans­form­ing the air­craft to be more dig­i­tally con­nected. This con­nec­tiv­ity is on the early phase of adop­tion. We have seen ex­am­ples of cut­ting edge type of ap­proach to us­ing the con­nected en­vi­ron­ment. One of th­ese ex­am­ples is what we have done with ACAS com­mu­ni­ca­tion with our ARINC IMS (In­for­ma­tion Man­age­ment Ser­vice). We are do­ing the com­mu­ni­ca­tions, data net­work and land­ing sys­tem avion­ics pack­ages for the Air­bus A350. The com­mu­ni­ca­tions sys­tem in­cludes next gen­er­a­tion VHF and HF sys­tems, a satel­lite com­mu­ni­ca­tions sys­tem with low profile an­tenna and dual Swift broad­band ca­pa­bil­i­ties, an avion­ics com­mu­ni­ca­tions router with datalink for ser­vices such as FANS-B and a ‘gatelink’ cel­lu­lar tech­nol­ogy sys­tem that links the air­craft with low-cost ground net­works once it has landed. The sys­tem tracks and probes the air­craft and when some­thing doesn’t go right it au­to­mat­i­cally in­creases the fre­quency of that sys­tem that is tracked by end ser­vices.

Then there is FOMAX (flight op­er­a­tions and main­te­nance ex­changer), dig­i­tally con­nect­ing A320 air­craft and op­er­a­tors. The so­lu­tion keeps op­er­a­tors con­nected to their air­craft by de­ploy­ing the in­fra­struc­ture for se­cure wire­less con­nec­tiv­ity; the box speaks to ev­ery­thing on the air­craft ag­gre­gates the trans­mis­sion and au­to­mat­i­cally sends it to ground-based op­er­a­tions. The unit also sends data au­to­mat­i­cally to the grow­ing num­ber of mo­bile ap­pli­ca­tions that are be­ing used by flight crews, as well as into ef­fi­ciency ap­pli­ca­tions such as weather, flight plan­ning, log­books, and main­te­nance pre­dic­tion and per­for­mance cal­cu­la­tors, all of which bring new lev­els of pro­duc­tiv­ity and value to air­line op­er­a­tions. As the mod­ern trav­eller evolves, so do air­ports. Air­ports must adapt, in­no­vate and en­vi­sion how to meet the needs of an in­dus­try where pas­sen­ger traf­fic is grow­ing by about 5 per cent each year. Rock­well Collins has a global pres­ence at more than 150 air­ports, in­clud­ing half of the 20 largest in the world. As a lead­ing provider of self-serve so­lu­tions, and with a rep­u­ta­tion as a mas­ter com­mu­ni­ca­tion net­work in­te­gra­tor, we un­der­stand that the flow of an air­port is the flow of an in­dus­try. We have the re­spon­si­bil­ity, that, when that pas­sen­ger turns to the air­ports, boards a flight, does what­ever con­nec­tiv­ity wise and then lands, we max­imise how to make the en­tire process ef­fi­cient and make most out of it.

Neetu: What has been the vi­sion be­hind the ac­qui­si­tion of B/E Aero­space?

Colin: How do you ex­pand a com­pany like Rock­well Collins, which has done sig­nif­i­cantly well in all do­mains? We have looked at what other ca­pa­bil­i­ties could be. B/E Aero­space is num­ber one in the mar­ket and with that num­ber one; Rock­well Collins has an ac­cess to all those mar­kets for ex­pan­sion. The ac­qui­si­tion strength­ens Rock­well Collins’ po­si­tion as a lead­ing provider of cock­pit and cabin in­te­rior so­lu­tions, of­fer­ing diversified prod­uct of­fer­ings for aero­space and de­fense. With the ac­qui­si­tion, Rock­well Collins ex­pands its port­fo­lio with a wide range of cabin in­te­rior prod­ucts for com­mer­cial air­craft and busi­ness jets in­clud­ing seat­ing, F&B prepa­ra­tion and stor­age equip­ment, light­ing and oxy­gen sys­tems and mod­u­lar gal­ley and lava­tory sys­tems.

Neetu: Can you give us the breakup of the turnovers and the busi­ness con­tri­bu­tions at­trib­uted to the broad ar­eas such as mil­i­tary and civil?

Colin: The com­pany mix now is 75 (gov­ern­ment): 25 (com­mer­cial). In com­mer­cial we now have B/E Aero­space, one nice note to make around the ac­qui­si­tion is that the ca­pa­bil­i­ties in­side our in­te­rior sys­tem busi­ness have his­tor­i­cally been ex­tremely fo­cused on air­lines and busi­ness avi­a­tion, we can

take those ca­pa­bil­i­ties to most channels seat­ing, light­ing, oxy­gen, gallery, etc. We bring the chan­nel knowl­edge so we can take those op­por­tu­ni­ties to our gov­ern­ment channels, to our cus­tomers and that’s one rev­enue syn­ergy.

Our gov­ern­ment busi­ness is in three ar­eas: Air­borne – ev­ery­thing we do on the air­craft plat­forms, avion­ics plat­form and tak­ing the com­mer­cial tech­nol­ogy that we have de­vel­oped through very large mar­kets such as fu­sion flight deck and putting around in the air­crafts such as KC-390 and even be­yond that, us­ing el­e­ments of fu­sion to ex­pand in par­al­lel do­mains that are new for us. We are us­ing the tech­nol­ogy with el­e­ments of fu­sion for cargo han­dling sys­tems and Em­braer trusts us to do that on edge. And then there is – com­mu­ni­ca­tions, nav­i­ga­tion and elec­tronic war­fare, the whole net­work -cen­tric op­er­a­tion tend to keep our forces com­mu­ni­cate ef­fec­tively, of­fer­ing col­lab­o­ra­tion with ef­fec­tive part­ners. Third of our gov­ern­ment busi­ness is – Sim­u­la­tion and Train­ing, which is grow­ing from strength to strength, lever­ag­ing our strengths in avion­ics sys­tems de­vel­op­ment and train­ing sys­tems de­sign, we de­liver in­te­grated so­lu­tions that cover the en­tire train­ing gamut, from in­struc­tional sys­tems de­sign through fully in­te­grated, high-fi­delity sim­u­la­tors. Of all the F35s go­ing around the world, we have huge stim­u­la­tion and train­ing op­por­tu­nity and we are do­ing very well with it. We un­veiled the first cer­ti­fied 737 NG stim­u­la­tor in China with our joint ven­ture. We are ob­vi­ously grow­ing and po­si­tion­ing for next-gen­er­a­tion train­ing in live vir­tual con­struc­tor which is com­bin­ing vir­tual as­sets with live, cre­at­ing an en­vi­ron­ment. Trained as we fight, we are mak­ing sure that we max­imise ef­fec­tively and min­imis­ing cost.

Neetu: What is the over­all size of Rock­well Collins in terms of or­der book/bal­ance sheet?

Colin: We are go­ing to con­clude this year at $6.7 bil­lion+ and that’s not a full year that in­cludes the B/E’s rev­enue half way, post the ac­qui­si­tions. We op­er­ate on gov­ern­ment fis­cal cy­cles.

Neetu: What are the con­tri­bu­tions of do­mes­tic (US) and ex­port mar­kets (out­side US)?

Colin: Now with B/E Aero­space, we are about 51 per cent when we get FY 18, we will be 50:50 i.e. 50 per cent in­ter­na­tional and 50 per cent do­mes­tic.

Neetu: Which re­gion/s con­trib­utes the most?

Colin: Our re­gions are di­vided in three; we have got in­ter­na­tional, In­dia, Europe, Mid­dle East and Africa then Asia-Pa­cific. We look down from In­dia way down to New Zealand and then the Amer­i­cas and which is Canada and ev­ery­thing from Mex­ico and be­low. EMEA has got al­most de­vel­oped west­ern economies in them and Air­bus is there and that’s the pre­dom­i­nance of what we are do­ing in in­ter­na­tional. So half of our in­ter­na­tional would be in that EMEA re­gion and next would be Asia-Pa­cific with next huge growth com­mer­cially now In­dia it­self, with SpiceJet, IndiGo and Jet Air­ways. Ev­ery King Air that goes into the coun­try is equipped with our equip­ment and we are do­ing well with the big air­lines as well. Big air­lines are huge cus­tomers of ours from day one. Then

Amer­ica will be the third re­gion.

Neetu: How do you find the Asian mar­ket vs. the de­vel­oped mar­kets?

Colin: Asia-Pa­cific is our big­gest, if we look at the per­cent­age growth year on year that is the big­gest growth. Growth in In­dia, in China, in South­east Asia, North East power house and Aus­tralia is al­ready a de­vel­oped mar­ket. We see most growth com­ing out of Asia-Pa­cific. Mid­dle East is part of our EMEA re­gion and also a good mar­ket. We are do­ing well within avion­ics and in­te­ri­ors. When you fly Eti­had, Emi­rates or Qatar it is our sys­tems and B/E seats on those car­ri­ers.

Neetu: What are your on­go­ing pro­grammes that you are pur­su­ing in coun­tries such as In­dia and China?

Colin: In China you have seen us talk about the Head-up Guid­ance Sys­tem (HGS), that al­lows pi­lots of light- or mid-sized busi­ness air­craft to ben­e­fit from the tremen­dous safety and op­er­a­tional gains pre­vi­ously only avail­able to large air­craft, which is a very suc­cess­ful. We are work­ing with the Chi­nese Civil Avi­a­tion Au­thor­ity (CAAC) for long time, given their traf­fic con­cerns; growth of traf­fic airspace is get­ting busier and busier. HGS make lot of sense. CAAC es­sen­tially man­dated pub­lish­ing an ap­pli­ca­tion road map whereby end of 2020, 50 per cent of the air­planes have to be equipped and we are al­ready over that, and we are not even close to 2020. Whole con­nec­tiv­ity side has been a big deal in China as well lots of com­pa­nies are pop­ping up ac­cen­tu­ated by pas­sen­ger value added ser­vices. In In­dia, com­mer­cial is grow­ing strength to strength, we have talked about those the big air­lines, bizav is also grow­ing. With the cur­rent DPP and ‘Make in In­dia’ phi­los­o­phy around de­fense, there is a place into our strat­egy where we part­ner in coun­try to achieve some­thing. In In­dia, it’s a big com­po­nent on how we are go­ing to carry our gov­ern­ment busi­ness. So re­la­tions with the Tatas, Zen is im­per­a­tive and with th­ese al­liances, we aim to emerge in the near fu­ture, as key part­ners to the In­dian armed forces.

Neetu: You have a de­sign cen­tre in In­dia. What are your fu­tur­is­tic plans for this?

Colin: We have the In­dia De­sign Cen­ter (IDC) which has been an ab­so­lute jewel; we love what we do in In­dia. It has ex­panded sig­nif­i­cantly; we are cur­rently about 1,000 peo­ple in the IDC and have two lo­ca­tions Hyderabad and Bengaluru. With the ac­qui­si­tion of B/E Aero­space, we have more to come. From th­ese cen­ters we can op­er­ate with great ac­cess to tal­ent, be­cause it is, ‘aero­space’ and aero­space is it is ex­cit­ing, the tal­ent grav­i­tates what is ex­cit­ing. We of­fer round the clock na­ture of sup­port for our cus­tomers and it is re­ally pow­er­ful, each of our busi­nesses are pulling on that ca­pa­bil­ity and It is re­ally go­ing well. We will take this jour­ney for­ward to in­te­rior sys­tems.

Neetu: Would you like to elab­o­rate on any spe­cific ac­tiv­ity in con­text to In­dia touch­ing upon mil­i­tary and/or civil mar­kets’ po­ten­tials?

Colin: Growth of air­line busi­ness is solid be­cause of the ac­cess to eco­nom­i­cal travel for the masses; mid­dle class in In­dia, the traf­fic will con­tinue to grow. And, with all those air­lines grow­ing, there is good for­tune for us! We are in­volved with all of them pretty much ex­clu­sively that is a great en­vi­ron­ment. In re­gard to the mil­i­tary en­vi­ron­ment, the bud­gets are in­creas­ing, the DPP is still ac­cre­tive to cus­tomers/sup­pli­ers like us and the coun­try like US is do­ing busi­ness in In­dia through part­ner­ship. The en­vi­ron­ment is still good news for de­fense busi­ness through part­ner­ships. It is the speed of ex­e­cu­tion some­times that we have to be pa­tient about for a bright fu­ture. Pa­tience and per­sis­tence are the key con­stituents for suc­cess.

‘We are tak­ing an­other leap to­wards trans­form­ing the air­craft to be more dig­i­tally con­nected’